[zybar]

Can people please not go down the path of claiming product "X" isn't worth its asking price because the parts list that makes up product "X" is only "Y" percentage of the list price?

We should all know by now that there is a lot more that has to go into a product's list price than the parts required to make it.   

Besides parts cost, what about a few of the following:

Labor
R&D
Shipping and packaging
Marketing
Inventory/warehousing
Profit (pretty important if you want to stay in business)

If companies don't price their products properly they go out of business.

Clearly, a company such as Wilson Audio knows how to price and market their product. 

George

[warnerwh]

I usually figure something is worth what someone will pay for it. It doesn't matter what it cost to make it or how much matter is there.

If someone made a suit with a built in cloaking device(40 years and we will have them) that cost them 10k to build you may think I'm crazy to be willing to pay 10 million. If I had the money I probably would.

[Bigfish]

I usually figure something is worth what someone will pay for it. It doesn't matter what it cost to make it or how much matter is there.

If someone made a suit with a built in cloaking device(40 years and we will have them) that cost them 10k to build you may think I'm crazy to be willing to pay 10 million. If I had the money I probably would.

Man, you could really have some fun with something like that!!

[Bill Baker]

 This is only one of hundreds of similar questions posted on forums everyday. It boils down to the fact that Wilson is still in business and doing quite well. Audio Note still makes a $200,000.00 amplifier and $1,000.00 capacitors, OCC still sells $150,000.00 choppers, and the list goes on. Would I buy some of these products if I had the money   Yep, probably would.

 There are guys here at AC that will spend hundreds of dollars for a single tube. Guess what..tubes wear out and you throw them away. Just like a light bulb. A speaker is going to last a very long time.

Every product has a place and reasoning in the market and there will always be someone that is willing to pay the price to get it.

 To answer the question asked in the fisrt post.... there is no answer. It's simply part of life.

[95bcwh]

I don't see anyone claiming that because the price is 100 times the parts then the product is not worth buying.

Price is ALWAYS determined by supply & demand.

Now, there's nothing wrong about knowing the costs of the parts. What's there to hide?

[Daygloworange]

Price is ALWAYS determined by supply & demand.

In a competitive market, price is more a function of what the market will bear.

Cheers

[Bigfish]

This is an interesting thread!  Every company tries to sell their products at the top price the market will support.  Normally a company like Wilson will build a reputation and as a product ages they will introduce a new improved model.  Thus, rather than erode the pricing of an old model they discontinue it and charge more for the new model.  Pricing by a company like Wilson has nothing to do with the cost of the components.  They (Wilson) have chosen their target customer market and as long as they are successful they do not have to change their market strategy.  

Ken

[95bcwh]

Huh?

Are you saying that "In a competitive market, price is more of a function of what the market will bear, and less of a function of supply and demand"???

Actually, the "market"  == "supply and demand". If you think they are different, then you have probably misunderstood the terms "supply and demand". The economists use it in a much broader terms, to encompass all the factors that go into the determination of the final price, i.e. where the supply curve intersects the demand curve.

see here (Microeconomic 101):
http://en.wikipedia.org/wiki/Supply_and_demand

Price is ALWAYS determined by supply & demand.

In a competitive market, price is more a function of what the market will bear.

Cheers

[Bigfish]

Huh?

Are you saying that "In a competitive market, price is more of a function of what the market will bear, and less of a function of supply and demand"???

Price is ALWAYS determined by supply & demand.

In a competitive market, price is more a function of what the market will bear.

Cheers

The high-end Audio Market is not oriented at the Big Box Store Buyer.  I would agree that a high-end company like Wilson is charging "what the market will bear" and their pricing is not driven by supply and demand.  I think TonePub mentioned that Wilson has a backlog of orders so in theory they could raise their pricing!  Their pricing is not driven by the supply of speakers in the market, it is driven by their reputation.

Ken

[Scott F.]

Price is ALWAYS determined by supply & demand.

Not always. Gas prices are completely counter-intuitive to the supply and demand rule.

Want to build your own pair of Watt Puppies? Heres your chance. Thorsten came up with an alternative design a few years back.

He called it the David-Jerico.

[95bcwh]

Oh yeah? Care to elaborate?? aa

see these:
http://en.wikipedia.org/wiki/Natural_gas_prices
http://en.wikipedia.org/wiki/Price_of_petroleum
http://en.wikipedia.org/wiki/Oil_price_increases_of_2004-2006

Of course, you could be talking about gasoline price..then see the title of this report :
http://www.ftc.gov/reports/gasprices05/050705gaspricesrpt.pdf

and this:
http://www.thepriceoffuel.com/whataffectsfuelpricing/

Again, I maintain that the terms "supply and demand" is being defined more broadly than some people assume it to be.

Not always. Gas prices are completely counter-intuitive to the supply and demand rule.

[linkweewee]

Why does a pair of these speakers cost more than a Toyota Prius?

Why does a Porsche 911 cost more than a pair of Zu speakers?

[PhilNYC]

Not always. Gas prices are completely counter-intuitive to the supply and demand rule.

When there is a gas shortage, gas prices shoot up.  How is that counter-intuitive?

[Bigfish]

Do the normal laws of supply and demand impact the pricing of Wilson Watt Puppy Speakers?  Yes, because people want the speakers and there is limited production you can assume that supply and demand drives the pricing.  However, I think the basis of this thread was aimed toward why Wilson Watt Puppy Speakers are so expensive in a world full of speaker choices?

1. Some people will purchase the speakers because they believe the speakers are fairly priced for the sound they produce and for the quality of their finish.
2. Prestige factor - Wilson has developed a reputation for selling high-end speakers.  People that don't know anything about audio and have plenty of money can buy Wilson Watt Puppies.  The speakers will sound good and they will fill the niche of every purchase they make - high end!

Give Wilson credit because they have been successful building a reputation for producing quality, high-end speakers.  What Wilson charges for them is predicated mostly on what the market is willing to pay.  Probably the best market to compare high-end audio products to would be the diamond market.  Diamonds have a reputation for value but the real value is in the eye of the beholder.  Don't you think speakers fit the same definition?

Ken

Ken

[BrianM]

What is the sound of one hand clapping?

[TONEPUB]

Want to build your own pair of Watt Puppies? Heres your chance. Thorsten came up with an alternative design a few years back.

He called it the David-Jerico.

This is all well and good, but it's not the same cabinet design, crossover or drivers....

I have an interview/factory tour of Wilson lined up for the end of the year.
I'll report on what I see in person!

[macrojack]

For whatever reason, a mythology arises surrounding certain products. Traditionally this occurs at the hands of the reviewing establishment. In recent years there has been a good bit of diffusion applied because of an increase in the number of review sources and an explosion of the number of product sources.
There is a Sutter's Mill Effect present in audio manufacturing because you just never know when you might strike it rich. Dreams abound. Maybe I can design the next Wilson.

But the underlying reality is that the game is relatively closed. The established manufacturers have an enormous edge because of the blue chip status afforded by name recognition and lingering reputation.

Perhaps some of you remember Chivas Regal. It was an average scotch with a fancy bottle in a velvet pouch. The ads in Playboy led one to assume that the stuff was liquid heaven and that the mere mention of Chivas would get you laid and lead to a promotion. The ad campaign worked. The illusion was a success. So too is Wilson a success of illusion over reality. Yes, they make a quality product. So does Aerial. Yes, they use first rate materials. So does Vandersteen. Yes, they are made in USA. So is Zu. Yes. Yes. Yes.

But are they better than these other speakers? That's always subjective. People have to like them better for them to be better. There is no absolute sound. I submit that people buy Wilson because they perceive them to be better. And a good bit of that perception is fed by the Chivas Regal model. Wilson is wrapped in gimmick just like Bose. The two companies have much more in common than you elitist Wilson owners could ever bring yourselves to acknowledge. The best is seldom the best known.

[BrianM]

But are they better than these other speakers?

Having been more or less shot down on the pricing issue (the right price = whatever people will pay) you now change the subject to the sound.  That's a whole nother thread.

[macrojack]

BrianM - You are the one who changed the subject by selectively emphasizing a tiny excerpt of my comment.
En toto, I am still very much on topic. If you feel the need for another thread, start one.

[ctviggen]

Perhaps some of you remember Chivas Regal. It was an average scotch with a fancy bottle in a velvet pouch. The ads in Playboy led one to assume that the stuff was liquid heaven and that the mere mention of Chivas would get you laid and lead to a promotion. The ad campaign worked. The illusion was a success.

Chivas Regal 18 is one of the best scotches I've ever had.  I highly recommend it.  Even Whisky Magazine gives it a silver recommendation:

Whisky Mag Rating